Arcade raises $15 million to provide NFT-backed loans

Arcade has completed a $15 million Series A financing to provide mortgage loans, linking the rapidly growing non-fungible token (NFT) space with decentralized finance (DeFi).

Arcade co-founder Gabe Frank told CoinDesk in an interview that the funds will be used to develop products and increase staff, including legal staff who help the company deal with the regulatory environment.

This round of financing includes well-known cryptocurrency investor Pantera Capital, and other investors include Castle Island Ventures, Franklin Templeton, BlockFi CEO Zac Prince, and Quantstamp CEO Richard Ma.

Arcade evaluates, validates, and curates NFT collections for institutions, decentralized autonomous organizations (DAOs), and wealthy collectors. Lenders can obtain new sources of income, and asset owners can realize liquidity on the assets they hold, while retaining all rights and access to Arcade collateral.

Arcade is fully compatible with all ERC-20 tokens, including wETH, USDC and DAI. The company's Wrapped NFT technology allows multiple NFT assets to be bundled and used to obtain a single loan. Arcade is also an open source DeFi primitive that allows developers to build on the platform.

Arcade's Frank entered the encryption field professionally for the first time in 2018, but he understood the power of alternative assets early on. HI's family owned a chain of pawnshops in Texas, which gave Frank an insight into loans secured by irreplaceable physical assets such as diamonds, watches, and paintings.

"I started collecting NFTs and realized that there was an infrastructure gap in access to the liquidity of these assets," Frank said. As the market value soars, he infers that the credit market surrounding physical assets will be formed around irreplaceable assets.

Arcade is privately issued, with a total loan amount of US$3.3 million, secured by assets worth US$10 million on the Arcade platform.

"Arcade's mortgage on this new asset class will incentivize the participation of new entities from the traditional and digital arts and financial sectors, including institutional lenders, high-net-worth individuals, DAOs, companies with NFTs on their balance sheets, and NFT collectors and creators. ," Pantera Capital principal Lauren Stephanian said in a press release.

As more and more people own NFTs, the demand for accompanying DeFi applications is also growing. Other NFT derivatives projects include fragmentation platform Fractional, stacking provider NFTx, cross-chain liquidity agreement Taker and NFTfi, and another company that provides NFT mortgage loans.